Internal Analysis of Woolworths Group Limited: A Management Report

This report provides an internal analysis of Woolworths Group Limited, a major retail and supermarket chain in Australia and New Zealand. It begins with an overview of Woolworths' business operations, including its history, structure, and financial performance. The core of the report focuses on a capability analysis, employing the VRIO framework (Valuable, Rare, Inimitable, and Organized) to assess Woolworths' key competencies. These include its decentralized business operations, diversified brand portfolio, employee skills and training programs, and its extensive product range. The analysis highlights how these resources contribute to Woolworths' competitive advantage in the global retail industry, emphasizing their value, rarity, and the challenges in imitation. The report concludes by summarizing the key findings and suggesting that the effective management of these resources is critical for the company's future sustainability and success. The report references academic sources to support its analysis.

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Introduction:
The internal analysis or the capability analysis is a well- known form of evaluation
conducted on the business organizations with precise intention of identifying the resources
that are crucial for the success of the companies (Henkel, Bider & Perjons, 2014). It is
important for the organizations to achieve the availability of the resources that place the
organizations in a perfect manner for the achievement of the much required competitive
advantage and the findings of the internal analysis educate the senior management of the
organizations regarding the excellence of their resources (Rothaermel, 2013). The paper
evaluates the business operations of one of the retail giant of Australia named as Woolworths
Group Limited. The paper includes a short overview of the business activities of the company
and along with that, the paper identifies some of the important competencies of the company
that have the potential to provide the much required competitive advantage to the company in
the global retail industry. Other than this, the paper includes some of important findings of an
internal analysis conducted on the mentioned company for providing an important assessment
of the impactful resources of the company.
Overview of the company:
Woolworths Group Limited is one of the retail and supermarket giant operating in
Australia and New Zealand. The company was established in the year 1924 with a joint
initiative undertaken by Percy Christmas, Ernest Williams, Cecil Scott Waine, Stanley
Chatterton and George Creed (Woolworthsgroup.com, 2019). The company has the
capability to serve the customers of Australia and New Zealand. The company is currently
headquartered in Bella Vista of New South Wales. According to the 2018 annual reports of
the company, the company is able to employ 205000 number of employees for the effective
management of the business operations in different divisions of the company

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(Woolworthsgroup.com, 2019). The company is currently managed by the chairman of the
company, Gordon Cairns and the chief executive officer of the company, Brad Banducci
(Woolworthsgroup.com, 2019). Apart from this, the company is able to conduct a notably
profitable business over the years and that is pretty evident with the increment of the revenue
to 55.669 billion Australian Dollars in the year 2017 (Woolworthsgroup.com, 2019). Along
with that, the company generated an operating income of 2.326 billion Australian Dollars in
the same year (Woolworthsgroup.com, 2019).
Capability Analysis:
With a precise focus on the importance of the tools such as SWOT, VRIO or RBV, it
becomes important for the companies operating in the modern business world to apply them
for identifying the competencies that have the capability to provide the much required
competitive advantage to the organizations (Pesic, Milic & Stankovic, 2013). Considering the
VRIO framework it is understandable that a particular competency of a company will be
capable of providing the much essential competitive advantage to the company only if it
effectively satisfies the aspects of the model such as valuable, rare, inimitable and organized
(Simão & Diaz, 2013).
One of the main core competency of the company is the excellent decentralization of
the business operations of the company. The company is able to establish different divisions
for their business operations which is pretty prominent with the presence of Woolworths,

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Woolworths Online and Countdown in the supermarket domain, BWS, Dan Murphy’s,
Langtons and Cellarmasters in the Liquor domain, Big W in the general merchandise domain,
Woolworths Finance and Woolworths Rewards in the Finance domain along with ALH
Group in the Hotel and Gambling domain (Woolworthsgroup.com, 2019). Hence it is evident
that the company is able to establish a business where the representation of considerable
number of eminent brands is pretty prominent. The strong and diversified brand portfolio of
the company plays a crucial role in the success of the company as that effectively attracts the
customers for repetitive purchases from the company. Along with this, the diversification of
the brands helps the company in the effective management of the varying demands of the
customers. Hence, it is evident that the brand portfolio of the company is valuable for the
success of the company in attracting larger number of customers (Todor, 2014). Along with
this, the companies face the necessity of building the much required infrastructure for such
efficient diversification of the brands and under such situation, the brand portfolio of the
company can be considered as rare and costly to imitate. Along with this, the expanded
business operations and the increment in the revenue and the operating income of the
company signifies well organization from the part of the company for the generation of the
value.
Other than this, the skills and the technical competencies of the employees is
considered as one of the important resources for the company. The training module of the
company provides ample amount of opportunity for the employees of the company to learn
the required skills. Woolworths provides three to four years training for their apprentices
which includes on job training and off the job training at local TAFE College
(Wowcareers.com.au, 2019). Apart from this, the company provide significant amount of
opportunity to the apprentice bakers for getting trained in the aspects such as the food safety
and sanitation, baking bread, time management and effective management of the other

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resources as well. Other than this, the excellence of the Fastrack programs to the leadership
and management have the capability to convert the employees to skilled retailers considering
the diversity of the experience. The senior management of the company acknowledges the
importance of the Fastrack program in building the future managers and leaders of the
company (Wowcareers.com.au, 2019). The emphasis of the senior management of the
company is observed to be well distributed amongst forms of the training which is evident
with the 70% workplace training for the employees, 20% coaching and mentoring along with
the inclusion of 10% formal development programs. Other than this, the participation in the
Supermarket Retailing Level 2 training program plays a significant role in educating the
employees of the company regarding the required skills and knowledge for the effective retail
business management in the sales floor (Wowcareers.com.au, 2019). Hence, it is
understandable that training program of the company is significantly valuable for the
improvement of the technical skills of the employees and in order to develop such impactful
training module, the company faces the necessity of investing considerable amount money
which not only makes it costly to imitate but also increases the rarity of it. The training
module is perfectly organized by the company for the improvement of the soft and hard skills
of the employees of the company.
Apart from this, one of the major success factor for the chosen organization is the
diversified product range of the company. Considering the brand portfolio and the expertise
of the company in delivering variety of the products, it is evident that the company delivers
all sorts of retail products with a precise focus on the fast moving consumable goods through
their supermarket chains. Along with that, the company has the expertise to deliver the
optimum quality liquor products, consumer electronics, general merchandise products,
hospitality industry services through their different brands (Woolworthsgroup.com, 2019).
Hence the strong product range of the company enables it to serve the customers of Australia

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and New Zealand in an efficient manner. Considering the increasing population in the
regions, majority of the supermarket chains are observed to face the requirements of variety
of different products and under such situation, the strong product chain of the company
enables it to cater the needs of the customers in an effortless manner. It is understandable that
the retail supermarkets offer considerable amount of products to their customers, however,
the establishment of such diversified product range such as Woolworths Limited becomes
difficult for any established supermarket chain. Hence the achievement of the mentioned
competency becomes costly to imitate for the other companies and is rare in modern business
world as well.
Conclusion:
On a concluding note, it is visible that the company has some of the important and
rare resources in store for gaining the competitive advantage in the business world and along
with that, the effective utilization of the mentioned resources is seen to add significant
amount of value to the business operations of Woolworths. In addition to this, the proper
management of the resources in future have the capability to contribute to the sustainability
of the business operations of the mentioned company.

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References:
Henkel, M., Bider, I., & Perjons, E. (2014, June). Capability-based business model
transformation. In International Conference on Advanced Information Systems
Engineering (pp. 88-99). Springer, Cham.
Pesic, M. A., Milic, V. J., & Stankovic, J. (2013). APPLICATION OF VRIO
FRAMEWORK FOR ANALYZING HUMAN RESOURCES’ROLE IN
PROVIDING COMPETITIVE ADVANTAGE. Tourism & Management Studies,
575-586.
Rothaermel, F. T. (2013). Strategic management: concepts. New York, NY: McGraw-Hill
Irwin.
Simão, J., & Diaz, P. (2013). An extended VRIO model as a framework for sustainable
tourism planning: a review. Tourism as a Tool for Development, 4, 71.
Todor, R. D. (2014). The importance of branding and rebranding for strategic marketing.
Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 7(2),
59.
Woolworthsgroup.com (2019). Woolworths Group: Quality Brands and Trusted Retailing.
Retrieved 31 July 2019, from https://www.woolworthsgroup.com.au/
Wowcareers.com.au (2019). Training - WOW Careers. Retrieved 31 July 2019, from
https://www.wowcareers.com.au/page/Careers/Develop_your_career/Training/